Ameren Illinois Utilities Customers to Get Relief from Another Sharp Drop in Natural Gas Costs

From the Office of Ameren Illinois Utilities

Peoria (March 23, 2009) – As the 2008/2009 heating season draws to a close, Ameren Illinois Utilities natural gas customers will benefit from another sharp drop in the cost of natural gas.

The continued decline in the cost of natural gas is a reflection of weak global demand for energy that has led to declines in the market prices of both crude oil and natural gas.

The cost of natural gas delivered to residential customers during April will be much lower than the price paid in March. Natural gas prices for April are as follows: AmerenCILCO – $0.55 per therm as compared to $0.64 in March, AmerenCIPS – $0.58 per therm as compared to $0.68 in March, and AmerenIP – $0.57 per therm as compared to $0.64 in March, reflecting decreases of 14 percent, 15 percent and 11 percent respectively. Since their peak last fall, per therm natural gas costs for the Ameren Illinois Utilities have dropped by 50 percent to 60 percent.

“Natural gas prices continue to decline in the U.S. due to deteriorating industrial and power generation demand for the fuel. However, weak natural gas prices have driven gas producers to cut exploration budgets and reduce drilling operations which will impact supply availability,” said Ameren Vice President of Gas Supply and System Control Scott A. Glaeser.

Though the heating season is coming to a close, many Ameren Illinois Utilities customers have natural gas stoves and water heaters. Because a water heater accounts for about 13-17 percent of a residential customer’s total utility expenditures, the decline in natural gas costs will benefit those customers. In addition, the Ameren Illinois Utilities inject a significant amount of natural gas into underground storage during the summer period which may benefit customers next winter.

Though the cost of natural gas has fallen, the total amount of natural gas used by customers determines the size of customer bills. Customers are encouraged to learn more about using less energy to spend less at ActOnEnergy.com and to adopt proven energy conservation practices that will help reduce bills without sacrificing personal comfort.

• There is no substitute for insulation. Add insulation if attic floor joists are visible.
• Use of weather-stripping and caulking prevents outside air infiltration. This step keeps homes warmer in the winter and cooler in the summer.
• Make certain exterior doors have a tight fit.
• Reduce the cost of water heating by using cold or warm water in the washing machine, a step that will also extend the life of clothing. Get more life out of the water heater and reduce energy costs by periodically draining the tank to eliminate the buildup of sediment.
• Look for the Energy Star qualified label when buying appliances, lights, heating and cooling equipment, home electronic products, office equipment and more. Energy Star consumers save money. In 2008, the U.S. Environmental Protection Agency estimates the Energy Star program saved consumers about $19 billion on their utility bills, avoiding greenhouse gas emissions equivalent to those from 29 million cars. For information, call 1-888-STAR-YES or visit: www.energystar.gov.
• The Ameren Illinois utilities recommend customers enroll in the Budget Billing plan. This free service allows customers to pay the same amount each month of the year. Customers may enroll on the Ameren Web site (www.ameren.com) or by calling toll-free 888-789-2477.
• Plant trees around the house. Trees substantially reduce energy use by shading roofs and walls from the summer sun and serving as a barrier against winter winds. For a free copy of “Planting Trees,” send an e-mail request to jmucho@ameren.com.

The Ameren Illinois Utilities purchase natural gas from gas producers located in various U.S. natural gas production areas. The wholesale price is not regulated, but rises and falls based upon market conditions caused by supply and demand. The Ameren Illinois Utilities pass the cost of natural gas on to customers, dollar for dollar without any profit or markup in price, through the Gas Charge (also referred to as the PGA, which means “purchased gas adjustment”). About two-thirds of a typical residential customer’s bill is the actual cost of natural gas.

The Gas Charge is recomputed each month and may go up or down depending on the wholesale price of natural gas. The Gas Charge is a matter of public record and is available on the Ameren Web site (www.ameren.com) under “Historical PGA Rates” for AmerenCIPS and AmerenCILCO and “Historical Gas Charges” for AmerenIP.

The Ameren Illinois Utilities strive to keep natural gas costs at stable and reasonable rates for their customers, while dampening the effects of market volatility and price spikes from the wholesale gas markets. The utilities utilize sophisticated financial hedging strategies and negotiate both long- and short-term natural gas supply contracts.

The Ameren Illinois Utilities utilize a number of interstate pipeline suppliers, accessing multiple production areas to bring natural gas to Illinois.

The Ameren Illinois Utilities have been providing safe, reliable energy delivery service for more than a century. The Ameren Illinois Utilities deliver energy to 1.2 million electric and more than 840,000 natural gas customers in about 1,000 communities, while helping customers spend less by using less and communities grow through economic development initiatives.